GBP

The pound has been in demand this morning supported by “risk on “ market sentiment . A rise in equities after the Federal Reserve Bank confirmed they would speed up the tapering of their bond buying scheme , paving the way for interest rate hikes , drove a demand for riskier assets . Sterling is up around 0.6 % on the day against the dollar and around 0.25 % against the euro . All eyes will now turn to the Bank of England rate decision at 12.00 pm . Although the majority of economists do not expect the central bank to raise rates in light of Omicron uncertainty , yesterday’s record high inflation data has put the decision in some doubt .

EUR

The euro is consolidating against the dollar after the Federal Reserve Bank decision . The single currency fell as the markets took on board the news that the Fed would end their bond buying scheme in January , but then benefitted as initial enthusiasm for higher interest rates in the US turned into confidence to take more risks with stocks and other currencies . Later today it will be the turn of the European Central Bank to announce its decision on monetary policy , which is widely expected to remain on hold . Following the announcement , President Christine Lagarde will hold a press conference where she will be questioned about current and future central bank policy .

USD

The dollar continued its slide in early trading which started as markets digested policy statements announced at last night’s Federal Reserve Bank meeting .The Dollar index rose as much as 0.3% after the federal reserve Bank issued a statement on monetary policy that paved the way for raising rates 3 times next year , but by the time Chairman Jerome Powell had finished a news conference 90 minutes later the greenbacks fortunes had turned, and stocks were climbing to near record levels on Wall Street . During his statement Powell noted that economic activity is on track to expand at a robust pace this year , adding , however, that the Omicron variant posed risks to the outlook.

Economic Calendar
12.00 pm GBP Bank of England rate decision
12.00 pm EUR ECB rate decision
12.30 pm ECB policy statement
13.30 pm ECB press conference